editorials
The KRA should be talking about tax refunds
Friday, May 12, 2023
Times Tower in Nairobi, headquarters of the Kenya Revenue Authority. file image | Denis Onsongo | NMG
The Kenya Revenue Authority (KRA) has been hurting decades of corporate cash flows from delays in tax refunds.
The delays deprived companies of funds to reinvest in their operations and turn a profit, affecting future taxes, in a classic case of shooting yourself.
Since the tax officer demands that taxes be paid within 24 hours, it is only natural for businesses to expect the same speed when it comes to refunds.
Despite various reforms to cure the headache of refunds, the KRA still owes companies Sh12 billion as of the end of April, depriving local businesses of much-needed liquidity.
The proposals for the 2023 Finance Bill should serve as a wake-up call for the taxpayer to meet their end of the bargain, aligning the shift in tax refunds with its demand on taxpayers.
MPs who play an oversight role in passing the Finance Bill should ensure that dual proposals to speed up payments on refunds are adopted.
This will allow taxpayers to offset current and future tax liabilities with pending tax refunds and mitigate cash flow challenges.
The reduced refund processing timeline from two years to six months is also a welcome relief.